"Jere Lull" wrote in message
news:2008092719152975249-jerelull@maccom...
On 2008-09-27 17:13:36 -0400, "Capt. JG" said:

"Jere Lull" wrote in message
news:2008092716442316807-jerelull@maccom...

Should the entire economy tank and we go into a depression, my
investments and house will have the same value relative to the price of
bread, about the only true measure.

Well, that might not be true... if you have money in stocks, say a mutual
fund, and we have a depression where the companies go out of business,
the stock will become worthless.

That portion of the mutual fund would become worthless, but a
broadly-based mutual fund will track what its based upon. I'm tending
towards index funds that "blindly" invest in every company in, for
instance, the Fortune 500. THAT could become worthless only if ALL those
companies went out of business. If that happens, we will have worse things
to worry about.

It wouldn't actually take all of the companies in a broad-based index fund
to go under for the portfolio to be worthless. It might not be worthless
initially, but I bet that if 30% went under, the rest would probably follow.
Essential industries would remain, backed by the gov't, but that's about it.

While it's true that your house will always retain some value, this also
depends on who actually owns the house.

Ours has been free and clear since '85, courtesy of my parents who married
in '35.

Well, then at least you won't get booted out, although if there are enough
foreclosures, I doubt the banks would make such a move.

--
"j" ganz @@
www.sailnow.com